Gem Diamonds Limited · LSE:GEMD
Gem Diamonds — H1 2020 Earnings Presentation
19 slides from Gem Diamonds's earnings presentation, September 2020
Slide 1: Operating responsibly in uncertain times
Operating responsibly in uncertain times
Slide 2: Disclaimer
This presentation is confidential and is being made only to, and is only directed at, persons to whom this presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in this p
Slide 3: H1 2020 highlights
Revenue EBITDA Average US$ per carat US$69.5 million US$11.3 million US$1 707 Business All Injury Frequency Net debt reduction of Transformation Rate (Historical low) Cumulative to date US$4.7 million 0.33 US$65.0 million Earnings per share from continuing Carats recovered Cash flow per share operat
Slide 4: COVID-19 timeline at Letšeng
Gem Diamonds Letšeng 2019 annual reopened results released Letšeng Plant 1 Global shutdown and AV COVID-19 due to ore Plant 2 ore Waste pandemic Lesotho treatment treatment mining declared lockdown started started started 11-Mar 18-Mar 28-Mar 2-Apr 26-Apr 1-May 27-May 12-Jun 1-Jul Tender 2 Tender 2
Slide 5: COVID-19 impact on the global economy and diamond prices
COVID-19 significantly COVID-19 added significant Impact on pricing of Letšeng's impacted the global economy downward pressure on large high-value diamonds with national lockdowns diamond prices from March Global GDP contraction of Mine closures, suspension Flexible tender processes adopted for sale
Slide 6: Safety performance: AIFR at historical low
• AIFR at historical low • No fatalities or LTIs in the Period • Benefits from intensified focus on safety, visible leadership and training implemented in 2019 • Continued focus on dam safety (Global Industry Standard on Tailings Management issued in August 2020) • No major or significant environmen
Slide 7: COVID-19 community aid and on-site response
• Aid provided to surrounding communities - Distribution of PPE, sanitizer and “tippy-taps” (contactless hand wash system) - Training of 48 community healthcare workers to lead COVID-19 awareness programmes - Distribution of food parcels to 482 families - Four-room mobile structure donated to Minist
Slide 8: Business transformation: US$100 million initiatives
• Implemented initiatives on track to deliver US$100 million • Potential COVID-19 impact on timing of delivery • US$65 million benefit achieved to date • Implementation of continuous improvement strategy continues US$100 million implemented $34m 13% $30m 6% $23m $20m 46% $12m 35% $1m $10m 2017A 2018
Slide 9: Operational performance
• 30 days operational time lost due to Ore tonnes treated (millions) shutdown from 28 March H1 2020 2.4 • Further 30 days phased ramp-up operating H2 2019 3.4 on one treatment plant only H1 2019 3.3 H2 2018 3.5 • Revised 2020 mine plan implemented H1 2018 3.0 • Normal ore treatment achieved by 27 Ma
Slide 10: Large diamond recoveries
182.92 carat 439.60 carat Type IIa white diamond recovered on 19 August (sixth largest gem quality diamond recovered at Letšeng since 2006) 114.37 carat ~233 carat recovered on 31 August 93.17 carat 48.16 carat
Slide 11: H1 2020 sales highlights
• H1 2020 sales highlights: Average $ per carat - 16 diamonds sold for >US$1 million each, H1 2020 1 707 generating revenue of US$29 million FY 2019 1 637 - 16 diamonds sold for >US$20 000 per carat FY 2018 2 131 (US$26 million) FY 2017 1 930 - >10.80 carat diamonds account for 78% of FY 2016 1 695
Slide 12: H1 2020 income statement
% US$ million H1 2020 H1 2019 Variance Revenue 69.5 91.3 Royalty and selling costs (7.6) (8.4) Cost of sales (43.7) (52.5) COVID-19 standing costs (3.3) - Corporate expenses (3.6) (5.1) Underlying EBITDA from continuing operations 11.3 25.3 (55) Depreciation and mining asset amortisation (6.2) (7.1)
Slide 13: Operating costs
% H1 2020 H1 2019 Variance Ore tonnes treated (millions) 2.4 3.3 (27) Direct cash costs¹ 181.74 148.28 Operating Costs Plant 3 operator costs 12.51 13.67 Sub-total 194.25 161.95 20 Tailings treatment plant costs 3.09 1.63 Business Transformation costs Fees and employee reward scheme 1.66 10.52 Total
Slide 14: Statement of financial position
30 June 31 December % US$ million 2020 2019 Variance Non-current assets 268.8 337.3 IFRS 16 Right of use assets 4.4 8.5 Deferred tax assets 6.3 7.9 Current assets 28.2 38.9 Income tax receivable 5.5 8.2 Cash 17.3 11.3 Total assets 330.5 412.1 (20) Equity attributable to the parent company 93.8 158.7
Slide 15: Cash flow and liquidity
• Cash generated by Letšeng of US$37.4 million during the Period • Gross cash of US$17.5 million • Net debt of US$5.5 million • Available facilities of US$51.6 million US$ millions 37.4 2.3 15.5 69.9 51.6 8.0 3.6 2.0 1.7 0.9 0.3 1.7 11.4 17.5 Cash and Letšeng - Net Financial Letšeng - Working Corpor
Slide 16: Revised 2020 guidance
2020 2020 Revised Original Guidance Guidance Waste stripped (Mt) 15 - 17 23 - 25 Ore treated (Mt) 5.4 - 5.6 6.7 - 6.9 Satellite pipe ore contribution (Mt) 2.4 - 2.5 2.5 - 2.6 Carats recovered (Kct) 96 - 100 118 - 122 Carats sold (Kct) 92 - 96 115 - 119 Direct cash costs (before waste) per tonne trea
Slide 17: Contacts
Gem Diamonds Limited Susan Wallace T: +44 (0) 203 043 0280 IR@gemdiamonds.com Celicourt Communications Mark Antelme / Ollie Mills T: +44 (0) 20 8434 2643 gem@celicourt.uk
Slide 18: Share price performance, shareholders and company officers
Share price performance peer comparison Gem Diamonds Limited is listed on the Main Board of the London (rebased to 100) Stock Exchange LSE: GEMD 140 Daily average trading volume across all platforms 120 Gem Diamonds 344k (last six months to 21-Aug) 100 Shares in issue 139 460 961 80 Free float 71.
Slide 19: Gem Diamonds Limited
GEM BAVONDS! | Gem Diamonds Limited 2nd Floor, Coastal Building, Wickham’s Cay Il, PO Box 2221, Road Town, Tortola, British Virgin Islands, Registration number: 669758 www.gemdiamonds.com